Use a Purchase Debit Note for returns of goods or packaging materials, such as pallets or containers, if:

• The Purchase Order is fully processed.
• The goods are now in your inventory. 

When you raise a Debit Note in the Purchasing System, the Inventory System’s Quantity on Hand immediately reduces by the quantity quoted. However, the Supplier (Vendor) Account does not update until you post the Debit Note transaction. Therefore, the standard practice is to leave the Debit Note unposted until you receive the Supplier (Vendor) Credit Note. 

See:

• Creating Purchase Item Debit Notes 
• Creating Batch Purchase Debit Notes 

There are three ways you can deal with discrepancies between your Debit Note and the Supplier (Vendor) Credit Note.

Option One: Amend the Debit Note 

Recall the Debit Note for correction before posting it. If the discrepancies involve quantity, you can amend this now. The system will reverse the original Debit Note quantity as well as process the new quantity.

See:

• Creating Purchase Item Debit Notes 

Option Two: Make Stock Adjustments

Make a Stock Adjustment immediately after the physical goods are returned. 

When you receive the Supplier (Vendor) Credit Note, process a Batch Debit Note. If you are concerned about the delay in posting, process and post a Debit Note immediately. This updates both the Stock position and the Supplier Ledger. Then deal with any price differences or disputes, such as damages, using the system’s Journal facilities. 

See:

• Creating Batch Purchase Debit Notes 
• Stock Adjustments  
• General Ledger Journals 

Option Three: Cancel the Order

If the Purchase Order is still in process, cancel the Order in the Purchase Order system. If it is un-delivered this will cancel the full Order. However, if it is partially delivered this will only cancel the balance of the Order, so if you are returning the delivered Items to the Supplier (Vendor), proceed as in option two.

Take account of this type of transaction when conducting an Inventory Check to ensure that Supplier (Vendor) Returns have been processed fully to ensure no miss-matches at the point of Stock Take.

See:

• How does the Purchase Ordering System Work? 
• How do I carry out an Inventory Check or Stock Take? 

The system acts in the same manner as described for Suppliers (Vendors) but in reverse. 

If the Items have been delivered out of your Inventory, use the Sales Credit Note facility to log the goods back into your Inventory. You do not need to wait for further documentation. Post the Credit Note immediately, updating the Inventory and the Customer’s Account simultaneously.

Similarly, if the Customer’s Order has not been fulfilled you can click Cancel Order in Sales Order Processing to cancel the remainder of the Order. Proceed to invoice the delivered portion or take the partially delivered portion back into inventory and issue a Credit Note if required.

See:

• Creating Sales Item Credit Notes 
• How does Sales Order Entry Work?